Swiggy IPO: A New Chapter for India’s Food Delivery Giant
On November 6, 2024, Swiggy Limited, one of India’s leading online food delivery platforms, made its much-anticipated debut in the Indian primary market with its initial public offering (IPO). This marks a significant milestone for the company, which has transformed the way people access food and groceries in urban India. The IPO will remain open for bidding until November 8, 2024, allowing investors a brief window to participate in what could be a lucrative opportunity.
IPO Pricing and Objectives
Swiggy has set its IPO price band between ₹371 and ₹390 per share, aiming to raise a substantial ₹11,327.43 crore through a combination of fresh shares and an offer for sale (OFS). This capital infusion is expected to bolster Swiggy’s growth strategies, enhance its technological infrastructure, and expand its market presence in the competitive food delivery and quick commerce sectors.
As the IPO subscription opened, shares of Swiggy were already making waves in the grey market, trading at a premium of ₹11, indicating strong investor interest ahead of the official bidding period.
Subscription Status
As of the first day of bidding, the Swiggy IPO had been subscribed 0.12 times overall. The retail portion saw a more promising response, with a subscription rate of 0.54 times, while the non-institutional investor (NII) segment lagged at 0.06 times. These figures suggest a cautious but optimistic sentiment among retail investors, who are often seen as the backbone of IPO subscriptions in India.
Key Details of the Swiggy IPO
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GMP (Grey Market Premium): Currently, Swiggy shares are trading at a premium of ₹11 in the grey market, reflecting positive market sentiment.
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Price Band: The IPO price range is set between ₹371 and ₹390 per share.
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Bidding Dates: The IPO is open for subscription from November 6 to November 8, 2024.
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IPO Size: The total amount Swiggy aims to raise is ₹11,327.43 crore, which includes both fresh shares and an OFS.
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Lot Size: Investors can apply in lots, with one lot consisting of 38 shares.
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Allotment Date: The expected date for share allotment is November 9, 2024.
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Registrar: Link Intime India Private Limited has been appointed as the official registrar for the IPO.
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Listing Date: Swiggy shares are expected to be listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on November 13, 2024.
- Lead Managers: The IPO is being managed by a consortium of financial institutions, including Kotak Mahindra Capital, Citigroup Global Markets India, Jefferies India, Avendus Capital, JP Morgan India, BofA Securities, and ICICI Securities.
Should You Apply for the Swiggy IPO?
The question on many investors’ minds is whether to subscribe to the Swiggy IPO. Analysts have varied opinions on the matter. Rajan Shinde, a Research Analyst at Mehta Equities, has given the IPO a ‘subscribe’ rating, citing Swiggy’s consistent innovation and strategic expansion as key factors that position the company for sustained growth in the evolving hyperlocal commerce landscape.
Conversely, Anshul Jain, Head of Research at Lakshmishree Investment and Securities, advises caution. He notes that while Swiggy’s valuation appears attractive—nearly half that of its competitor Zomato—investors should not view it as an arbitrage opportunity. Jain emphasizes the need for Swiggy to improve its EBITDA margins and Average Order Value (AOV) in quick commerce to narrow the valuation gap, which may not happen in the near term. Thus, he maintains a ‘Do Not Subscribe’ rating for the IPO.
Other analysts, including Dr. Choksey and SBI Capital Securities, have also assigned a ‘buy’ tag to the public issue, reflecting a mix of optimism and caution in the market.
Conclusion
The Swiggy IPO represents a pivotal moment not only for the company but also for the Indian food delivery sector as a whole. With a robust business model, a loyal customer base, and a growing market, Swiggy is poised for significant growth. However, potential investors should weigh the insights from various analysts and consider their own risk tolerance before making investment decisions. As the bidding period unfolds, all eyes will be on how the market responds to this high-profile IPO.
For those looking to stay updated on the latest developments, it’s advisable to follow reliable financial news sources and consult with certified investment experts.